Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Economist’

Northern member states unite on euro-zone reform

Posted by hkarner - 9. Dezember 2018

Date: 06-12-2018
Source: The Economist

The group, dubbed the New Hanseatic League, abhors fiscal transfers

In the late Middle Ages the Hanseatic League, a confederation of merchant guilds in northern Europe, dominated maritime trade in the Baltic and North seas. Now finance ministers from the northern states, characterised by their fiscally hawkish and free-market views, are hoping to set the course for reforms to the European Union. Composed of Denmark, Estonia, Finland, Ireland, Latvia, Lithuania, the Netherlands and Sweden, the group, dubbed the New Hanseatic League, is starting to have some influence.

The immediate impulse for the alliance, which first assembled over dinner in Brussels about a year ago, is Brexit. The group had considered its interests well enough represented as long as Britain’s free-market stance and Germany’s fiscal prudence tempered the French enthusiasm for “solidarity” (ie, redistribution) and protectionism. But Britain’s withdrawal means that they have lost a champion of openness.

At the same time, the French and the Germans have an irksome habit of cooking up reforms to the single-currency area between them. The latest example of that was in June, when Emmanuel Macron and Angela Merkel agreed a common position. Their declaration formed the basis for the package of reforms that eu finance ministers thrashed out on December 4th, and which will be formally agreed on by heads of state in Brussels on December 14th. Den Rest des Beitrags lesen »

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Our end-of-year awards celebrate the worst in politics

Posted by hkarner - 9. Dezember 2018

Date: 06-12-2018
Source: The Economist: Bagehot

And the winner is…

One of the highlights of any political journalist’s year is the Spectator dinner. Politicians and hacks drink fine champagne, eat good food and exchange juicy gossip, while the magazine’s editor hands out awards to Members of Parliament. But this year’s dinner, held on November 28th, had a surreal air. It was as if the Russian political class was toasting its brilliance in 1917 or the German one celebrating its triumphs in 1932.

The awards are supposed to recognise the best of the British parliamentary system. That system is convulsed by its worst crisis in the democratic era, as politicians fall over each other to make fools of themselves and ancient traditions crumble. Everywhere you look you can see politics at its worst: conspiracy, back-stabbing, grandstanding and chaos. So, in tune with the spirit of the times, we present an alternative set of awards.

Starting with the minor gongs, let’s honour the seat-blocker of the year. The one thing that the Conservative Party has going for it is a rising generation of talented mps, but their progress into government is being stymied by ministers who should never have been promoted. Liam Fox, the trade secretary, and Andrea Leadsom, Leader of the House of Commons, are strong candidates for this award, but nobody can hold a candle to the transport secretary, Chris “Failing” Grayling, whose combination of incompetence and unpopularity put him several lengths ahead of the rest. Not only did Mr Grayling mess up the introduction of a new train timetable so badly that whole sections of the railway system seized up, but he tried to palm the blame off on everybody but himself. This week a parliamentary committee produced a report on his performance so withering that, in normal times, he would have had to resign. But Mr Grayling had taken the precaution of being the first cabinet minister in David Cameron’s government to back Brexit, thus making himself unsackable. Den Rest des Beitrags lesen »

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The best way out of the Brexit mess

Posted by hkarner - 6. Dezember 2018

Date: 06-12-2018
Source: The Economist

The case for a second referendum

Parliament cannot agree on what kind of Brexit the people want. Rather than guess, it should ask them

It took theresa may a year and a half to reach a deal with the European Union. It looks as if it will take Britain’s own Parliament less than a month to throw it out. An imminent vote on whether to approve the prime minister’s Brexit agreement seems almost certain to be lost by a wide margin.

The government’s struggle to get the deal through Parliament exposes a crack that Brexit has created at the heart of Britain’s democracy. Most mps believe, with reason, that Mrs May’s imperfect compromise is worse than the status quo. As the people’s elected representatives, they have every right to block it. On the other hand, the referendum of 2016 gave them a clear instruction to leave. Although that vote carries no legal weight, it has taken on a moral force like little else. Today’s paralysis is the result of Britain’s inability to reconcile its tradition of representative democracy with its more recent experiments in the direct sort. Den Rest des Beitrags lesen »

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The consequences of saying no to Theresa May’s Brexit deal

Posted by hkarner - 6. Dezember 2018

Date: 06-12-2018
Source: The Economist

If Parliament rejects the prime minister’s deal next week, the result could be no deal—or no Brexit

To put it mildly, Theresa May’s government is not fully in control of Britain’s separation from the eu. On December 4th mps voted, for the first time ever, to hold the government in contempt of Parliament for refusing to publish legal advice about the withdrawal agreement from the attorney-general. Then they voted themselves a larger say in the whole process. On December 11th (unless the vote is postponed, which is unlikely), mps seem sure to reject the deal that Mrs May has spent the past year and a half crafting. What then?

Defeat is likely because a group of hardline Eurosceptics in the Tory party loathe the deal—as does the Northern Irish Democratic Unionist Party (dup) that props up the government. They fear that the “Irish backstop” (an arrangement crafted to avoid any risk of a hard border between Ireland and Northern Ireland) could keep Britain locked in a customs union with the eu indefinitely, robbing them of their dreamed-of clean Brexit. It looks as though almost every Labour mp will vote against the deal as well. So will a small band of Tory Remainers. Den Rest des Beitrags lesen »

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Working for a purpose

Posted by hkarner - 5. Dezember 2018

Date: 03-12-2018
Source: The Economist: Bartleby

An academic calls for an overhaul of the conventional company

The modern company has morphed into a “money monster” enslaved to the doctrine of shareholder value. That is the thesis of a new book* by Colin Mayer, a professor at the Saïd Business School in Oxford. It is the latest challenge to the principle enunciated by Milton Friedman, an economist: namely, that “there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game.” An influential paper** by Oliver Hart and Luigi Zingales last year argued that profitability is not the only criterion that should apply and that shareholders’ welfare is affected by a broad range of factors, including social and environmental conditions.

Mr Mayer takes a similar line, arguing that companies have relationships with many more people than just shareholders. As well as financial capital, they use several other types—human, intellectual, material (buildings and machinery), natural (the environment) and social (public goods like infrastructure).

He also notes that the original conception of a firm was quite different from now. The societas publicanorum were Roman bodies that performed public functions such as tax-collecting or maintaining buildings. They raised finance from shareholders and their shares were traded. The medieval idea of a company revolved around a family business. The founders were people who took bread together (hence the term cum panis). In the early-modern era, firms such as the Dutch and English East India Companies` were set up in order to pursue national trade objectives. Den Rest des Beitrags lesen »

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Financial firms have quietly prepared for Brexit

Posted by hkarner - 4. Dezember 2018

Date: 03-12-2018
Source: The Economist

The benefits of scale, regulation and fear

Since britons chose to leave the European Union in June 2016, the clichés have piled up almost as thickly as the votes: “no deal is better than a bad deal”; “Brexit means Brexit”. And you might count yourself rich—even by the City of London’s standards—if you had a fiver for every time you had heard a banker say his firm was “hoping for the best, but preparing for the worst”. Four months before Britain is due to quit the eu, financial firms have long ago given up hoping for the best (for most, that Britain would remain after all) and are still not sure they will avoid the worst—a sudden, no-deal Brexit on March 29th 2019. But they have been quietly bracing themselves for it.

Firms based in any eu member state may serve clients in any other: lending and raising money, trading and clearing derivatives, and insuring lives and property across the union without setting up shop locally, in a system known as “passporting”. London is by far the biggest base. If Parliament rejects Britain’s withdrawal agreement with the eu (a vote is due on December 11th), those London passports will expire in March. If it accepts the deal, they will run on while Britain and the eu sort out new arrangements. By June 2020 they should have frameworks to decide whether each other’s regulatory systems are “equivalent”, allowing some business to continue much as now. Either way, though, financial firms must keep serving their clients. Den Rest des Beitrags lesen »

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The US-China trade war is on hold

Posted by hkarner - 4. Dezember 2018

Date: 03-12-2018
Source: The Economist

Donald Trump and Xi Jinping agree a fragile truce at the G20 summit

PERHAPS IT was the dessert of caramel-rolled pancakes, crispy chocolate and fresh cream. Or perhaps President Donald Trump had already decided that, during a working dinner on December 1st, he wanted a deal with President Xi Jinping of China. Whatever it was, after sounds of applause drifted out to assembled journalists, the two announced a “highly successful” negotiation. „This was an amazing and productive meeting with unlimited possibilities for both the United States and China,” said Mr Trump.

A more realistic assessment would be that the meeting produced a truce based on two elements: some murky mercantilism, and a deal to talk about a deal. China will increase its purchase of American farm produce, energy and some industrial goods. In exchange America will delay an escalation in tariffs, from 10% to 25% on $200bn of goods planned for January 1st. That is on hold until March 1st at the earliest. But because the formal talks between the two countries could well fail, this truce is worryingly fragile.

The Chinese commitment to raise purchases of American goods is by an amount “not yet agreed upon, but very substantial”. That is supposed to reduce America’s bilateral trade deficit with China. Requiring the Chinese government to manage import flows is odd given how America’s government complains that China still behaves like a non-market economy. Den Rest des Beitrags lesen »

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Why is climate change so hard to tackle?

Posted by hkarner - 2. Dezember 2018

Date: 29-11-2018
Source: The Economist

A problem of unprecedented scope and intractability, to which current responses are unequal

It is more than a quarter of a century since the leaders of the world, gathered in Rio de Janeiro in 1992, committed their countries to avoiding “dangerous anthropogenic interference in the climate system” by signing the un convention on climate change. The case for living up to their words has only become stronger. The level of carbon dioxide in the atmosphere grows unremittingly. Average global temperatures have risen, too, to about 1°C above those of the pre-industrial era. The science that links the two is incontestable. Recent extreme-weather events, from floods in Hanoi to fires in California, were made more likely by the change that the climate has already undergone. Things will only get worse—perhaps catastrophically so.

In a sense the world is already equipped for the task at hand. Wind and solar power have, after huge subsidies, joined nuclear reactors and dams as affordable ways of generating gigawatts of electricity without burning fossil fuels. As our Technology Quarterly this week shows, parts of the energy system not easily electrified—some forms of transport, industrial processes like making steel and cement, heating offices and homes—could also be decarbonised with coming technologies. And policymakers have tools to bring about change, including carbon taxes, regulation, subsidies and, if they choose, command and control. Den Rest des Beitrags lesen »

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A heroic sailor faces expulsion from Italy’s Five Star Movement

Posted by hkarner - 24. November 2018

Date: 22-11-2018
Source: The Economist

Captain Gregorio De Falco shows the cracks within the ruling coalition

Seldom has the morale of Italians fallen as low as in 2012 when the Costa Concordia, a cruise ship, was wrecked near the Tuscan coast and abandoned by its Italian captain. Thirty-two passengers and crew died. The giant capsized hulk seemed to symbolise the failure of a country that months earlier had almost sunk the euro. But one man preserved Italy’s self-respect. Recordings surfaced of a coast-guard officer, Gregorio De Falco, furiously rebuking the skipper. His (unheeded) order to Captain Francesco Schettino to “Get on board, for fuck’s sake” became a national catchphrase.

Captain De Falco has since entered politics. In March he was elected a senator for the anti-establishment Five Star Movement (m5s), which has pledged to clean up Italian politics. Yet barely eight months on, this national hero is facing expulsion from the movement’s group in the upper house, having twice put his conscience ahead of his party. On November 7th Mr De Falco was among five m5s senators who refused to vote for a decree on security and immigration backed by the government, a coalition between m5sand the hard-right Northern League. Den Rest des Beitrags lesen »

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How does Brexit compare with other great crises?

Posted by hkarner - 24. November 2018

Date: 22-11-2018
Source: The Economist: Bagehot

This is Britain’s worst domestic mess of the democratic era

The only rule of British politics for the coming weeks is that nobody knows anything. The prime minister doesn’t know who will resign next. The factions don’t know their relative strengths. Nobody knows what is bluff and what is in deadly earnest.

But one thing that is increasingly clear in the fog of Brexit is that this is the most serious domestic crisis Britain has faced in the modern democratic era. In the statement that accompanied his resignation as transport minister earlier this month, Jo Johnson accused his own government of “a failure of British statecraft on a scale unseen since the Suez crisis”. Others have compared the current debacle to the imf’s bail-out of Britain in 1976 or the gold-standard crisis of 1931. In fact it is worse than anything else Britain has endured in peacetime. The political system is all but paralysed, the country is divided into warring ideological tribes, the civil service is overwhelmed and, in the event of no deal, Britain would be staring into the abyss.

Suez is a compelling comparison because it resulted from Britain’s failure to adjust to its diminished status in the world. The crisis paralysed the government for months and forced Anthony Eden to resign. But so what? The Tory party quickly replaced Eden with a much better prime minister, Harold Macmillan, and went on to win the next general election with an enhanced majority. The Brexit crisis has taken a far higher toll on the Conservatives than Suez: the head of one prime minister, David Cameron; the loss of the party’s majority in a botched election; and the resignation of a clutch of senior ministers. Den Rest des Beitrags lesen »

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